Regional property market gaining strength

With low interest rates contributing to consumer’s being more confident in property purchase decisions, not all regional centres are enjoying a boost with areas closely linked to resources sector still seeing deteriorating property conditions.

In particular, we're starting to see greater home value growth across many coastal lifestyle markets. With mortgage rates tipped to remain low, the attractiveness of housing, particularly in some of the larger coastal regional markets, is likely to continue to show further growth over 2015.

Regional report highlights:

  • Illawarra Region - recorded the largest increase in home values - up 9.3% for houses and 9.6% for units
  • Newcastle & Lake Macquarie region also saw solid results over the year
  • Gold Coast home values were up 4.8% for the year; 3.9% for houses and units
  • Sunshine Coast values increased by 6.3% for houses and 4.7% for units

 

Regional areas - Performance summary

Newcastle & Lake Macquarie | NSW

There were 8,205 Newcastle and Lake Macquarie homes sold over the 12 months to February 2015, down -2.8 per cent when compared to the previous period. Despite the fall in home sales, the number of houses sold increased (1.2 per cent) with unit sales down by a significant -18.3 per cent over the year. While sales volumes have slowed, home values are rising, up 7.4 per cent over the year to March for houses and 6.6 per cent for units. In dollar terms that is over a $31k rise for houses and over $23k for units. Homes listed for sale across the region are selling faster than they were one year ago, approximately 4 days faster for houses and 14 days for units.

 

Illawarra | NSW

Over the first quarter of 2015, Illawarra home values rose by 2.6 per cent for houses and 3.1 per cent for units, a solid result for the region, bringing home values 9.3 per cent and 9.6 per cent higher over the year for houses and units respectively. The number of Illawarra homes sold over the year to February 2015 was -3.1 per cent lower than over the previous year, with the fall in transaction volumes driven by units, down -14.4 per cent, compared to a rise in house sales of 2.5 per cent. Illawarra’s rental market has seen rents rise over the past year, up 2.3 per cent for houses and unit rents are 4.2 per cent higher than last year.

 

Richmond – Tweed | NSW

Richmond-Tweed sales activity in 2011-2012 was the lowest on record and since this time, sales volumes have been rising, with current sales activity 22 per cent higher than the five year average for the region. Home values across the region have risen over the past year, up 3.6 per cent for houses and a greater 4.5 per cent for units, which is well above the average annual five year performance for the region (-0.9 per cent for houses and -1.4 per cent for units). Similarly, rental growth across the region has been strong over the past year, with the advertised median weekly rental rate up 11.7 per for houses and 7.5 per cent for units.

 

Gold Coast | Qld

A broad overview of the Gold Coast housing market shows home values have moved 4.8 per cent higher for houses and 3.9 per cent higher for units over the year to March 2015. Annually, home values have been increasing since August 2013, showing an overall strengthening across the market. The number of Gold Coast homes selling has also increased over the year, up 1.8 per cent compared to last year. Over the year to February 2014, home sales were 35.1 per cent higher across the Gold Coast when compared to the previous year and the fact that these volumes have been maintained and furthermore improved on is a positive indicator of a strengthening market.

 

Sunshine Coast | Qld

Sunshine Coast dwelling sales remained stable over the year, up just 0.6 per cent over the 12 months to February 2015. Over the year to March 2015, house values rose by 6.3 per cent, or in dollar terms $29,945 to $508,148 and unit values were up $16,680 (4.7 per cent) to $370,910. Other key measures of the health of the Sunshine Coast’s residential property market have also improved over the past year. Rental rates have risen by 4.5 per cent for houses and 5.7 per cent for units, an incentive for potential investors, plus the average time on market has reduced and vendors are discounting their properties by less in order to secure a sale.

 

Townsville | Qld

Townsville sales volumes fell over the year to February 2015, down -10.0 per cent, which equates to 436 fewer Townsville homes changing hands over the period. The weakness across Townsville’s housing market can also be seen in property values, with the median value for detached houses falling -2.4 per cent over the year, while unit values are -1.4 per cent lower. Given Townsville’s fall in median values, and the fact that vendors are discounting, on average, -8.6 per cent for houses and -9.4 per cent for units from the original list price, indicates that the market has weakened on the back of a slowing resources sector.

 

Wide Bay | Qld

Over the past five years, sales volumes for the Wide Bay region have been low when compared to the preceding five year period. The number of homes sold over the year to February 2015 were 4.4 per cent higher than the five year average, however, volumes are -5.0 per cent lower than over the previous year. The first quarter of 2015 has been a slow start to the year for home values across the region, with house values up just 0.6 per cent and unit values virtually unchanged (+0.1 per cent). Although recent growth has been lacklustre, detached house values have risen by 6.6 per cent from their most recent low point in December 2012 and unit values are up 4.2 per cent.

 

Cairns | Qld

Cairns home values have appreciated by 5.1 per cent for houses and 5.7 per cent for units over the year, bringing the current median house value for Cairns to $368,047 and $226,137 for units. Meanwhile, advertised rents have also risen over the year, by a lesser 4.1 per cent for houses and unit rents are 3.6 per cent higher. Other key housing metrics are also showing improvement across Cairns, homes are selling faster than they were one year ago and the number of transactions has increased, albeit by a small amount (1.3 per cent) driven by unit sales, which are up 6.5 per cent year-on-year, as opposed to house sales which have actually fallen (-1.1 per cent).

 

Geelong | Vic

Over the 12 months to February 2015, the number of Geelong homes sold was -0.8 per cent lower year-on-year, however the fall in sales is attributed to the decrease in units selling (-4.4 per cent), while house sales were unchanged. The weakness in Geelong’s unit market, when compared to houses is made more apparent given that annual capital gains were significantly stronger for houses (+3.5 per cent), when compared to units (+1.6 per cent). This is not a new phenomenon given that over the past five years, the average annual growth for houses (+4.1 per cent) has outpaced units (+2.3 per cent).

 

Latrobe – Gippsland | Vic

On an annual basis Latrobe-Gippsland home values have been rising since May 2013 for houses and November 2013 for units. Based on the year to March 2015, house values are 2.3 per cent higher, while unit values have risen by 0.1 per cent. Meanwhile, the number of Latrobe-Gippsland homes sold is -3.9 per cent lower over the year to February 2015, with 223 less homes selling over the current period. The Latrobe-Gippsland rental market has strengthened over the year, house rents are up 3.8 per cent and unit rents are 2.3 per cent higher. Meanwhile, the indicative gross rental yield has remained steady over the year.

 

Bunbury | WA

As at March 2015, Bunbury house values were up 1.2 per cent on the previous year and unit values were 0.4 per cent higher, in dollar values that is $4,624 higher for houses and $1,240 higher for units. Despite the growth in home values, sales across the region were -4.7 per cent lower for houses over the year to February and -9.0 per cent less units were sold. The number of homes sold over the year (3,746) was -35 per cent lower than the most recent peak in home sales for the region over the 12 months to February 2005. Bunbury homes are offering relatively high indicative yields for investors, 5.1 per cent for houses and 5.4 per cent for units.